Can I sell an investment?
Private equity investments are generally long-term investments (typically five years or more) held until a Startup reaches a successful exit (IPO, acquisition, etc.) or closes. Under U.S. law, you cannot sell a private security for one year, except for sales or transfers:
- back to the Startup;
- to an accredited investor;
- as part of an offering registered with the SEC; or
- to a family member, to a trust you control, to a trust created for the benefit of your family member, or in connection with death or divorce.
After a year, you are permitted to sell the private security, though it may be difficult to find a buyer. Reselling of private equity is conducted in “secondary markets,” which at this point in time are not common.
We recommend that you always consider equity crowdfunding as long-term investments. They are much different from investing in the stock market or initial public offerings (IPOs). Learn more about how equity crowdfunding differs from the stock market.